How to Cover Wall Street

Sure, the The Dark Knight is a near definite Oscar winner. But it also may be a key to boosting Time Warner’s earnings and future stock performance.

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The problem with Capitalism is that when it doesn’t work, everybody expects a quick fix.

My original thought in September was that the U.S. government should never bail out financial institutions, especially using taxpayer money.

But the Treasury can’t undo what’s been done, they can only consider what TARP is actually doing to relieve a one-year-old recession and a tumorous financial crisis.

If you ask me — and I’m sure if asked Adam Smith — Corporate America needs to lean from its mistakes and accept that a free-market economy has its pros and cons. The more we soften the collapse of embattled corporations, the less likely those business will ever make genuine changes in how they run their operations or how they cut corners to make a bigger profit.

And the more our government tries to clean up the mess, the more likely future generations of American consumers, businesses, banks and investors will make the same mistakes.

The intervention between JP Morgan and Bear Sterns was tolerable. It was less a bailout in my view than an aggressive push. But it also flipped open a Pandora’s Box.

TARP is becoming a well-recognized mistake and any similar initiatives given to the auto industry would show equally lame results. Yet the Big Three have their open palms out now.

Goldman is sinking. Citi is imploding. And U.S. taxpayers are out $700 billion. Why would Ford, GM and Chrysler prove any different?

Here’s a solution: Take all that bailout money, put it towards education and start teaching finance and economics to kids in elementary school. Make it part of the core curricculum in all public and private schools all the way up to high school.

Good bye for now.

Wall Street makes more than almost any other industry as a whole, and the average salary doesn’t do enough to reflect the extremes.

I agree that $360,000 isn’t an exorbitant amount. But what’s the median and mode? I definitely know what the highs are: $1 million, $2 million, $3 million…

And a name like Felix Rohatyn shouldn’t be placed together with Richard Fuld’s, even if they both worked for Lehman Brothers.

Those who can serve our economy beyond serving themselves should be rewarded for their efforts, especially when they take immense pay cuts to do so — Henry Paulson excluded.

But CEOs like Fuld, who made $750,000 with a cash bonus of $4.2 million in 2007, have long been overpaid. So have most of the other top-tier executives and financial officers at banks and brokerage firms.

I’m not implying America should go Socialist. But part of deleveraging is getting used to less money.

Considering the past year’s events, giving Wall Street any bonus at all is a slap in the face to those who have worked just as hard and can barely afford to send their kids to college.

When I think about the journalists and teachers who need to find other jobs to live within their means, and the doctors who make less to work outside private insurance — people who are just as fundamental to preserving our country’s health and integrity — I am forever reminded that Wall Street makes enough off salary.

But as a believer in free market economies, I also believe that salaries, stock options and other rewards should be determined by the markets. Unfortunately, ours is tied down for the moment.

As George Orwell put it, “It is a feeling of relief, almost of pleasure, at knowing yourself at last genuinely down and out. You have talked so often of going to the dogs – and well, here are the dogs, and you have reached them, and you can stand it. It takes off a lot of anxiety.”

If that holds any meaning to investors at home and abroad, it’s to those anxiously waiting for the bottom:

The bottom of stock markets, the bottom of housing and credit markets, the bottom of ambiguous recessions muddled by GDP reports.

Perhaps Orwell would top even Warren Buffet as an oracle.

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John Mack “quickly signed,” the Wall Street Journal said in its coverage of the Treasury meeting with America’s top nine banking chiefs on Monday.

Maybe he did, or maybe he actually signed in alphabetical order — which would put him somewhere in the middle. “Before the meeting, John J. Mack said his bank, Morgan Stanley, did not need capital from the Treasury. It had just sealed a $9 billion deal with a large Japanese bank,” according to the New York Times account of the same event.

The details here might paint different pictures of Morgan Stanley, but the outcome is all the same. Mack and each of his peers definitively signed away on a $125 billion cash injection (executive pay caps included). Both papers clearly made that point in their coverage of the Washington gathering between the nine CEOs, Henry Paulson, Ben Bernanke and other government officials.

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